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5 Biggest Flops in Las Vegas History

Billions of dollars have been lost in Las Vegas by some of the best developers in the world.

Everyone knows that the megaresorts on the Las Vegas Strip are built by gamblers losing billions in the casino. But building a casino isn't the sure bet you might think it is.

In the last decade alone, billions of dollars have been lost by companies trying to build audacious casinos. Some, like MGM Resorts'(NYSE:MGM) CityCenter, are now open, but others sit as reminders of what a gamble the gambling business is.

Image source: Getty Images.

CityCenter-Harmon TowerOverall, CityCenter may have lost more money for its owners than any other property in Las Vegas history. The property half-owned by MGMResorts(NYSE:MGM) and Dubai World was built for $9.2 billion, and generated just $317 million in EBITDA during 2014. At an enterprise value of 10 times (about where gaming stocks are trading), the resort is worth just $3.2 billion today, a $6 billion loss.

But CityCenter isn't going to be sold anytime soon, so that loss in value isn't certain. What is certain is that the Harmon Hotel, which was taken down piece by piece during the past year, was a $400 million debacle for MGM and Dubai World. The resort never actually opened, and sat vacant in the middle of the world's most expensive resort, essentially serving as the most expensive billboard. No matter who was at fault -- MGM, contractors, architects -- the Harmon Tower at CityCenter was a mess.

Loss: $400 million.

Las Vegas PlazaIn 2007, the El-Ad Group bought the New Frontier from Phil Ruffin for $1.2 billion at the peak of the Las Vegas bubble. In November 2007, the New Frontier was knocked down, but within months it was apparent that the $5 billion resort the group planned to build was a long shot. It turns out that the Las Vegas Plaza never even started construction, and today, the 35-acre site is an empty lot.

Finally, last year, Crown Resorts bought the land that was New Frontier for $280 million, with plans to build a new resort with 1,100 rooms to be opened in 2018. It's an opportunity for Crown to enter the Las Vegas market, something El-Ad Group failed at miserably.

Loss: At least $920 million.

BYD's Echelon PlaceEchelon Place was supposed to be Boyd Gaming's(NYSE:BYD) big move into megaresorts on the Las Vegas Strip. It had owned the Stardust Resort & Casino since the 1980s, but that property was knocked down in 2007 to make way for the $4 billion Echelon Place project. Soon after the dust settled, the recession took its toll on Las Vegas and Boyd Gaming, and construction was halted just a few floors off the desert floor.

When the land, and the partially constructed resort, was sold to Genting Group in 2013 for $350 million, it resulted in a $994 million writedown for Boyd Gaming.

Loss: $994 million.

Fountainbleau Las VegasThe Fountainbleau project on the north end of the Las Vegas Strip may be one of the city's saddest living stories. The land was acquired by Turnberry Associates in 2000, which would eventually begin construction on the $2.9 billion project in 2007.

In mid-2009, after the tower was 70% complete, lenders withdrew on $800 million in pre-approved loans. The project soon went into bankruptcy, and has sat vacant ever since. It's estimated that a total of $2 billion was invested in the project before work was halted.

In 2010, Carl Icahn bought the property for $150 million and sold off the furniture and other assets. So far, there doesn't seem to be any interest in tearing the building down, or spending the $1 billion or so needed to finish construction. So one of Las Vegas' biggest flops sits vacant for all to see.

Loss: $1.85 billion.

The Cosmopolitan of Las VegasThe $3.9 billion Cosmopolitan in the middle of the Las Vegas Strip is the hottest resort to own, but it's also been a financial disaster. The resort went bankrupt in 2008 after developer Bruce Eichner defaulted on a $768 million loan, and Deutsche Bank took it over, becoming one of the least likely developers on the Las Vegas Strip.

But Deutsche Bank never intended to be in the gaming business long term and sold the property to Blackstone Group for $1.73 billion last year. In total, the losses exceeded $2.2 billion, although not all of that belonged to Deutsche Bank. Building a hip resort in Las Vegas isn't a guarantee of financial success, as the Cosmopolitan has proven.

Loss: $2.2 billion.

Be careful what you bet on Las Vegas isn't for the faint of heart, and these are just losses on single resorts. The private-equity buyout of Caesars Entertainment may lose its investors and lenders more than all of these losses combined, so even gaming companies are a big risk. This is something to keep in mind next time you're looking into gaming stocks.